Why ‘Encore Careers’ Fail Boomers

By Catey Hill

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Encore career, second act, bridge job – what burnt-out baby boomer doesn’t love the idea of a late-life career switch, new enough to be interesting and lucrative enough to make a full retirement financially possible?

The trouble, research shows, in spite of the media coverage and occasional success stories, those jobs aren’t plentiful or easy to find. New research shows that, while more workers over 50 say they have taken so-called bridge jobs, they tend to fall into two categories. One group is comprised of low-wage workers who can’t afford not to work, and are often moving from one lower-wage job to another. The other tend to be high earners who are already well-situated for retirement, and so can afford the kind of passion pursuit that characterizes the stereotypical bridge job: teaching, non-profit work, opening a bakery. The broad middle – the group of professionals who aren’t able to take big pay cuts, but would love a change of pace – may find it significantly harder. “It’s not always easy to make this kind of job transition,” says Dan Ryan, principal at Ryan Search and Consulting, a staffing firm.

The research, from the Center for Aging and Work at Boston College, reveals that about 60% of retirees in 2008 said they made a career switch after age 50 before they stopped working completely, up from an estimated 40% who did two decades ago. These career-switchers tend to come from the low and high income ends of the spectrum: Roughly two out of three low-income and high-income retirees in 2008 said they made a career switch before they stopped working completely, compared to only about half of middle-class retirees. (Low-income retirees typically made around minimum wage while working, high-income retirees made more than $50 per hour.) The research suggests that “those at the upper end of the spectrum were working because they wanted to (it was a lifestyle choice), while those at the bottom were doing so because they had to (for the pay and/or the medical coverage),” the researchers write.

If not for the zealous coverage of second act-type transitions and the desires of an entire undersaved generation to believe they can make a career switch on a whim, this trend might be surprising to most boomers. The job market is painfully tight right now, even for people with relevant experience and ambition to offer. A 50-something looking to change careers (read: little experience), but only for a few years, may be a tough sell for an employer overrun with applications. “It’s not very easy right now to voluntarily job hop,” says AARP policy analyst Sara Rix. “Many employers have certain perceptions about older workers.” These stereotypes — that older workers aren’t tech savvy, don’t learn quickly, cost too much – don’t always make them an easy sell, especially when they don’t have a ton of experience in a field.

The go-your-own-way fantasy of self-employment, whether it’s opening a bookstore or reinventing oneself as a consultant, isn’t easy either, especially if finances are a concern. The average entrepreneur spends $10,000 to put out a shingle, according to a study by Wells Fargo/Gallup Small Business, but that’s often not enough. SCORE, a nonprofit group devoted to aiding small businesses, recommends startup capital of at least $50,000 for most businesses, saying that “businesses that start with less have higher failure rates.” You’ll also likely shell out thousands of dollars a month in rent, insurance and supplies, experts say. And nearly half of all new businesses close within four years, many because they failed, according to data from the Census Bureau’s Business Tracking Series.

To be sure, some people find the success and happiness that advertisements are made of. After 24 years in corporate America, James Czupil, 55, made a career 180 last year. With his wife, a fitness instructor, he bought a Gold’s Gym in Linglestown, Pennsylvania, last year — a move that Czupil says is one of the best decisions they’ve ever made. Already, he says, they are making a tidy income. Career coaches also say that they’ve seen this done right. “It’s not always easy, but it can certainly be done,” says career coach Roy Cohen, author of “The Wall Street Professionals Survival Guide.”

For those who have their hearts set on a new career, experts say there are ways to make it easier. Start by treating it like any career change, says Kerry Hannon, an AARP jobs expert, as opposed to some kind of privileged career twilight. That means volunteering, moonlighting or taking an apprenticeship in the job you’re considering, she says. “It might not be all that you think it is.” Second, it’s easier to tackle one of these jobs in steps and stages rather than jump in all at once, she says. So, for example, if you’re considering a freelance writing career, take some gigs on the side while you’re still working full-time before you jump in full force. Finally, Hannon recommends anyone considering opening a new business check out Score.org and SBA.gov, both of which have free resources for small business owners.

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About Encore

Encore looks at the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities, needs and priorities of people saving for and living in retirement. Our lead blogger is editor Matthew Heimer, and frequent contributors include editor Amy Hoak, writer Catey Hill, and MarketWatch columnists Elizabeth O’Brien, Robert Powell and Andrea Coombes. Encore also features regular commentary from The Wall Street Journal retirement columnists Glenn Ruffenach and Anne Tergesen and the Director of the Center for Retirement Research at Boston College, Alicia H. Munnell.